Hi,
Have a try the following, prefer to connect your iPod with a Mac computer
For Mac computer
1. Open the disk utility, hope your iPod appears there (left hand side), highlight it
2. Go to Tab “Partition”, click either “Delete” or “Partition”, if fails, skip this step and go to 3
3. Go to Tab “Erase” , choose Volume Format as “MAC OS Extended (Journaled), and click Erase, again if fails, skip it and go to 4
4. Same as step 3, but open the “Security Options....” and choose “Zero Out Data” before click Erase. It will take 1 to 2 hours to complete.
5. Eject your iPod and do a Reset
6. Open the iPod Updater and click “Restore”
For Window computer
Go to folder “My Computer”
Hope you can see your iPod there and right click on the iPod
Choose “Format”. Ensure the settings are at “Default” and that “Quick Format” is not checked
Now select “Format”
Eject your iPod and do a Reset
Open the iPod Updater and click “Restore”
In case you do not manage to do a “Format” on a window computer, try to use some 3rd party disk utility software, e.g.“HP USB Disk Storage Format Tool”.
http://discussions.apple.com/thread.jspa?threadID=501330&tstart=0